Assemblyman Marc Levine, D-Greenbrae, has introduced a bill that would authorize the appointment of a public administrator to temporarily oversee the management of Pacific Gas & Electric Co. if necessary to protect public safety.
AB 1847 would give the California Public Utilities Commission (CPUC) the power to appoint the administrator to the investor-owned utility for up to 180 days if it determines that PG&E is not complying with state law, regulations or other directives from the commission. The law would grant the CPUC the authority to extend the appointment if it makes findings supporting the need for continued oversight.
PG&E filed for bankruptcy protection in January 2019 after being deluged with billions of dollars in claims tied to deadly wildfires. State fire investigators have judged PG&E responsible for starting 17 of the wildfires that raged through Northern California in 2017. The company has acknowledged that its equipment was responsible for the 2018 Camp Fire, which killed 85 people and leveled most of the town of Paradise.
“We cannot afford to wait for PG&E to do the right thing,” Levine said. “PG&E has proven themselves incapable of prioritizing public safety over corporate profits.”
Deanna Contreras, a PG&E spokeswoman, wrote in an email, “We are currently reviewing the bill and have not taken a position.”
Levine is in the early stages of drafting the full language of the bill. Under his proposal, the CPUC could create a test to determine if a public administrator needs to be appointed. The test would include analysis of PG&E’s financial health, the reliability of the utility’s infrastructure and its safety record.
Levine said, however, that he hasn’t decided whether the bill should mandate that such a test be done or to leave that decision to the CPUC.
“A lot of this is in negotiation with the CPUC,” he said. “We want to make sure that if this is passed into law that they’re able to use it effectively.”
In the past, the CPUC has been criticized for not being tough enough when regulating PG&E.
“There are new appointees on the commission,” Levine said. “The appointees are a reflection of the governors who made those appointments. I have full confidence that Gov. Newsom wants to make sure that PG&E is held accountable.”
Since taking office, Newsom has appointed two members to the five-member commission, including its president, Maybel Batjer, who joined the board in July. The other three commissioners were appointed by former Gov. Jerry Brown between May 2011 and January 2017.
Levine said his legislation will grant the public administrator oversight authority of PG&E activities that directly impact public safety, including the decision to shut down all or part of its transmission system to reduce the risk of a wildfire. For example, he said the public administrator would be granted the power to modify PG&E’s decision regarding how wide an area to de-energize during a public safety power shutoff.
During the weeks of Oct. 7, 2018, and Oct. 27, 2018, PG&E initiated a series of power shutoffs that left over 2 million Californians without power, prevented 130,000 students from attending classes and caused billions of dollars in economic losses. The utility’s CEO, William Johnson, has since said the blackouts might need to continue for another decade while PG&E hardens its distribution system.
Shalini Swaroop, general counsel and director of legislative and regulatory policy for the Marin-based power aggregator MCE, said, “I anticipate we will be supportive of the bill.” She added, however, that it’s too early in the legislative session for the organization to take a formal position on the legislation.
Likewise, Mindy Spatt, a spokeswoman for The Utility Reform Network (TURN), wrote in an email, “TURN is in agreement that more oversight over PG&E is needed, but we haven’t taken a position on this bill yet.”
Swaroop said there will be many bills introduced during the current session designed to ensure that PG&E improves its safety performance.
In November, MCE’s board met in closed session to discuss MCE’s interests in PG&E’s bankruptcy filing. During that meeting, the board also discussed policy principles for PG&E’s reorganization to be used in legislative advocacy.
MCE’s board believes that PG&E should no longer function as an investor-owned utility and should transition to a consumer-owned cooperative such as a mutual benefit corporation.
Newsom has said he wants a provision in the reorganization proposal that would permit the state to take control of PG&E’s assets if it fails to meet certain performance and safety metrics.
Levine, however, said, “I think it is a last resort to buy a carton of broken eggs, which is what a public takeover would amount to right now.”
Contreras said, “We remain firmly convinced that a government or customer takeover is not the optimal solution that will address the challenges and serve the long-run interests of all customers in the communities we serve. We remain focused on fairly resolving wildfire claims and exiting the Chapter 11 process as quickly as possible.”